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Buying a Home

Diana Chu 780-707-8886
Diana Chu 780-707-8886


Are you ready for home ownership? Buying a home is one of the biggest decisions that we can make, it is therefore important to educate yourself regarding all facets of home ownership before you start on your journey.

Firstly, you’ll no doubt be familiar with some, of the following terms, however, there might be some which you are less aware of, therefore it is worth going through the list to become even more more familiar with the process of buying a home.

Click on a term to reveal it's definition.

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Where payments are made to pay down the entire mortgage with regular scheduled payments.

A professional real estate appraiser will assess the value of the property.

Capped rate
An interest rate with a pre-determined ceiling - usually associated with a variable-rate mortgage.

Closed mortgage

A mortgage that cannot be prepaid, renegotiated or refinanced prior to maturity, unless stated in the agreed terms.

Closing costs
Costs that are in addition to the purchase price of a property and which must be paid on the closing date. Examples include legal fees, land transfer taxes, and disbursements.

Closing date
The date on which the sale becomes final, the new owner takes possession of the property and funds are transferred from the purchaser to the vendor.

Conventional mortgage
A mortgage where the borrower is contributing more than 20% or more of the value of the property as the down payment.

Convertible mortgage
A mortgage that you can change from short-term to long-term, depending on your financial needs.

Debt service ratio
The percentage of the borrower's income used for monthly payments of principal, interest, taxes, heating costs and condo fees (if applicable).

A homeowner is ‘in default’ when he or she breaks the terms of a mortgage agreement, usually by not making required mortgage payments or by not making payments on time.

Down payment
The money that you pay up-front for a house. Down payments typically range from 5%-20% of the total value of the home.

The difference between the market value of a property and the amount owed on the property. This difference is the amount a homeowner actually owns outright.

High ratio mortgage
A mortgage down payment which is less than 20% of the value of the property.

Home inspection
Home inspection is conducted by a qualified professional providing an unbiased opinion of the property's condition, thereby providing peace of mind in your purchasing decisions.


Land transfer tax

Tax levied on property being sold

Legal Fees and Disbursements
It is advisable to have a real estate lawyer go over the paperwork to make sure everything is as it should be so the costs associated with the sale or purchase of a property should be factored into the budget.

A loan that you take out in order to buy property. The collateral is the property itself.

Mortgage broker
A company or individual who helps the homeowner find the right financing to buy a property. A broker does not actually lend money but seeks out a lender and arranges the mortgage terms. This may include negotiating with the lender for the best possible deal for the homebuyer.

Multiple Listing Service (MLS)
A computerized listing of the properties available in your area, including information and pictures of each property.
Increasing the amount of your current mortgage, at a new interest rate. The term of the new mortgage must be equal to or greater than the term remaining on your current mortgage.

Taxes applied to the purchase cost of a property. Some properties are sales tax exempt (GST and/or PST), and some are not. For instance, residential resale properties are usually GST exempt, while new properties require GST. Always ask before signing an offer.

Variable rate mortgage
A mortgage with an interest rate that changes with the market. The rate changes each month, so the portion of your monthly payment that goes towards interest may go up or down each month. But your total monthly payment will probably stay the same.

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